Correlation Between Travelers Companies and China Health
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and China Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Travelers Companies and China Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Travelers Companies and China Health Industries, you can compare the effects of market volatilities on Travelers Companies and China Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Travelers Companies with a short position of China Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and China Health.
Diversification Opportunities for Travelers Companies and China Health
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and China is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and China Health Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Health Industries and Travelers Companies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Travelers Companies are associated (or correlated) with China Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Health Industries has no effect on the direction of Travelers Companies i.e., Travelers Companies and China Health go up and down completely randomly.
Pair Corralation between Travelers Companies and China Health
Considering the 90-day investment horizon Travelers Companies is expected to generate 25.06 times less return on investment than China Health. But when comparing it to its historical volatility, The Travelers Companies is 33.44 times less risky than China Health. It trades about 0.1 of its potential returns per unit of risk. China Health Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 22.00 in China Health Industries on August 31, 2024 and sell it today you would earn a total of 11.00 from holding China Health Industries or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
The Travelers Companies vs. China Health Industries
Performance |
| Timeline |
| The Travelers Companies |
| China Health Industries |
Travelers Companies and China Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and China Health
The main advantage of trading using opposite Travelers Companies and China Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, China Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Health will offset losses from the drop in China Health's long position.| Travelers Companies vs. Progressive Corp | Travelers Companies vs. Chubb | Travelers Companies vs. The Allstate | Travelers Companies vs. CNA Financial |
| China Health vs. Signet International Holdings | China Health vs. National Beverage Corp | China Health vs. PT Astra International | China Health vs. Vita Coco |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |